Verification Changes with Higg FEM 4.0 Update

With the Higg FEM 4.0 update, Cascale made changes to its verification approach. In short, this started with narrowing the scope of verification to a Core set of questions in CY2024 (Higg FEM 2023), slightly expanding the verification scope to all Level 1 questions in CY2025 (Higg FEM 2024), and committing to develop a fit for purpose approach to verify Level 2 and Level 3 questions.

What is the evolution of Higg FEM use cases?

The latest verification update evolved with members in mind. With deployment of Higg FEM 3.0 in the Cascale member supply chains, tool adoption scaled exponentially at the rate of 60 percent CAGR between CY2019 and CY2023. Through member interactions and monitoring adoption patterns, Cascale observed that the Higg FEM has evolved to serve three distinct use cases, described in Exhibit A below.

Exhibit A: Evolution of Higg FEM use cases

Evolution of Higg FEM Use Cases:

1) Code of Conduct / Foundational performance of a factory (permits, discharges, and management systems, among other factors)

2) Impact Metrics (quantities of resources consumed: energy, water, and environmental impact created: GHG, waste, wastewater, and air emissions)

3) Performance Management: targets, baselines, improvements, Progressive and Aspirational indicators in Level 2, Level 3 of Higg FEM.

During its Annual Meeting in Munich, Germany held in September 2024, Cascale presented these use cases at the Session titled: “Higg FEM and Verification Evolution.” The full session recap can be found here. Cascale received validating feedback on these use cases from the member community.

Image: Cascale member cut and sew factory during Higg FEM verification Image credit: Dhawall Mane

Why is a different approach needed to verify Level 2, Level 3 questions?

With such varied use cases, verification approaches and methods needed to evolve accordingly. Note that the current verification approach for environmental assessment such as Higg FEM is primarily inspired from the social audits approach, which is fit for Use Case 1) mentioned above.

The intent of questions in Levels 2 and 3 of Higg FEM is geared towards evaluating the progressive and aspirational practices of a factory. The scoring weightage for Level 2 questions is 50 percent, while Level 3 questions is 25 percent, indicating that a significant proportion of the scoring weightage (75 percent) is pinned on questions in Level 2 and Level 3. Cascale believes that adopting a coaching-based approach, wherein verification is viewed as an engagement rather than an event, is necessary to bring transformational change for the factories engaging with the verification process. One example of this is whether a facility has a coal phase out plan (Section: Energy & GHG, Question: 17, Level 2); Cascale envisions a verification approach wherein the verifier can support the factory to identify and unlock barriers towards phasing out coal from their operations, rather than merely identifying whether the factory’s response is accurate or inaccurate

Cascale has resourced a three phase project on Verification Scope Expansion starting in the second quarter this year to support this industry need. The first phase is aimed at publishing a whitepaper which outlines the verification methods and implementation criteria for such an expanded verification service. This whitepaper will also set the base for a pilot which will be conducted by Cascale to test such an approach in the real world before releasing it at scale. This whitepaper, aimed to be released in the first quarter of 2025, shall be built in consultation with Cascale members. Members curious about the consultation process can tune into the town hall in December on governance, tools, and membership via Cascale Connect.

What is next for Higg FEM verification? 

As for what’s next, please stay tuned for more information detailing the ongoing evolution of the verification program. Cascale will be sharing key updates on our website as well as Cascale Connect.